Food price outlook for Quarter 2 2020 and beyond

The crystal ball has just become more opaque than ever: as with every other aspect
of social and economic life in the time of COVID-19, food inflation projections for the
second quarter of 2020 and beyond have just become much more difficult. In an
attempt to contain the spread of the virus, many countries have gone into lock-down,
which is having a major influence not only on world trade, but also on food
consumption patterns, which may turn out not to be permanently affected, but that will
be with us at least for the next two quarters.

To add to the complexity of the matter,
the cut in South Africa’s credit rating to junk status has contributed to a rapid
depreciation of the South African Rand. The combined effect of the depreciation as
well as the current disruptions in the supply of and demand for food will be the main
drivers affecting food prices for the rest of 2020.

This 5th brief draws on current and historical insights to provide a clearer picture of
the expected trend in food price inflation. This is combined with an exploration of the cost of
healthy eating relative to selected income sources, as well as an analysis of price dynamics for
critical food products.